What role will telcos play? - Monetize data or serve as trusted third parties?

Transcription

1 What role will telcos play? - Monetize data or serve as trusted third parties? Give Customers the Control of their Digital Lives Digiworld Summit 2016 Plenary Session Day 2 Trust as an opportunity - Players working to provide a safe environment

2 Give Customers the Control of their Digital Lives What role will telcos play? - Monetize data or serve as trusted third parties? Digiworld Summit 2016 Plenary Session Day 2 Trust as an opportunity - Players working to provide a safe environment

3 Back Give Customers the Control of their Digital Lives What role will telcos play? - Monetize data or serve as trusted third parties? Digiworld Summit 2016 Plenary Session Day 2 Trust as an opportunity - Players working to provide a safe environment

4 We are at the beginning of a new society Agricultural Society 4000 BC ~ 1763 Industrial Society 1764 ~1970 Internet Society 1971 ~ 2015 Internet penetration Average consumption of protein per capita Average consumption of electricity per capita 4

5 Are we at the beginning of a new society? Agricultural Society 4000 BC ~ 1763 Industrial Society 1764 ~1970 Internet Society 1971 ~ 2015 Internet penetration Average consumption of protein per capita Average consumption of electricity per capita Is this a true revolution? 5

6 It is a revolution: the way of doing things is changing and the essence of this change is not the technology New ways to meet demands of consumers in the digital economy Transport Hospitality Telcos Technology sectors Traditional sectors A challenge for all Entertainment Media Finance Developed countries Emerging countries Growing Economies Economies in crisis It is a true revolution 6

7 We are at the beginning of a new society: which is the next step? Agricultural Society 4000 BC ~ 1763 Average consumption of protein per capita Industrial Society 1764 ~1970 Average consumption of electricity per capita Internet Society 1971 ~ 2015 Internet penetration Data Society After 2015 Average consumption of info-data per capita 1. Always connected 2. Data processing 3. Transformation of Business Models Digital Economy What data society means? 7

8 1 Always connected, generating more and more data Exponential data traffic Global CAGR Everyone & everything connected x10 mobile +10% +50% smartphone subscriptions data traffic / smartphone +55% mobile video traffic

9 2 Data will not only be stored, it will be processed to generate insights Exponential data volumes BIG DATA Data / month Only storing data gives value to nobody 800 EXABYTES 200 TERABYTES 800 TERABYTES 2,400 PETABYTES 20 EXABYTES 80 EXABYTES

10 3 The preeminence of data explains current huge investments Why to pay 22 Bn for companies that do not make money? Why to invest $8 Bn/year in data centers? 3x 2x 17,7 23,8 3x 32,7 Property / Plants /equipment ($Bn) 40, f (1) Telefónica acquires Vivo in 2010 for M (9,8 $Bn) Source: 10

11 Low Customer Value HIgh 3 and strategic transformations to seize the data opportunity Industrial firms becoming software companies (GE business model evolution) and building in-house capabilities Transactional Sell parts & repairs 2008 Contractual CSAs (contract service agreements) Share Risk reducing the total cost of ownership Expanded Customer Outcomes (Optimized assets and operations) Use data and analytics to provide decision support services 2016 > 500 >1.115 Experts of Data Science and Big Data Experts of Data mining / visualization, Art. intelligence, computing & statistics and economics *GE Software HQ: A global center to develop & support software applications uniformly across business. Launched in Nov to seize the opportunity of Industrial Internet. Software specialists were assembled together at the GE SW HQ (re-location of talent). 11

12 Data economy grows in the context of the Digital Challenge The Challenge Digital Economy is Economy itself Digital Life is Life itself The rules of the game Our Digital Footprint 12

13 Data for what? Storing data could not serve any purpose, but. Data can enrich customers lives, and benefit society 13

14 A wide variety of benefits derived from the use of data Data for Social Good Data to increase services efficiency Data to face world challenges or even to improve Gov. official statistics Intelligent Transport Systems Smartcities Pandemic disease information To prevent crime Pre-positioning Emergency Services Smart Agriculture More accurate daily inflation series 14

15 But also data generates fears Sometimes for good reasons 15

16 Negative perceptions 16 Source: Citizenme survey - June 2016

17 Partially connected with OTT business model, where revenues are directly linked to commercial and intensive usage of personal data Advertising spending per channel (US, $Bn) Advertising Revenue (US) OTTs are advertising companies 17

18 and associated problems in Transparency 98% of university students (1), didn't bother the TOS before signing up for a fake social networking site They agree to provide their first-born child as payment for the service 10 pages The terms of service was 4,316 words (10 pages) 16 minutes is the average adult TOS reading time (2) (1) 543 University students involved in the study. (2) For readers, average TOS reading time was 51 seconds. The average adult reading speed is words per minute (TOS should have taken 16 minutes). 18

19 and Security Latest Anthem 80,000,000 Ashley Madison AOL 2,400,000 Adobe 36,000,000 Ebay 145,000,000 Evernote 50,000,000 Security breaches. Stolen records Home Depot 56,000,000 Mossack Fonseca JP Morgan Chase 76,000,000 Living Social 50,000,000 Turkish Yahoo citizenship 500,000,000database 4,9611,709 Tumbrl 65,000,000 Yahoo Japan UBER Source: 19

20 As a result, the management of data is now in the public agenda, and confidence is becoming a business challenge GDPR Telefonica s public agenda Portability OPEN INTERNET Forget me DIGITAL CONFIDENCE CUSTOMER DIGITAL ACCESS Explicit opt-ins Data Sovereignty Public security Level Playing Field 20

21 Internal data The big question: Is there any space for Telco Operators in this world? External data Customer and context Differential knowledge Telecom operators have a lot of data Products & Services Video, cloud, security, IoT obtained operating the 3 core platforms OSS/BSS/IT Full stack, computation Physical assets Networks, data centres, distribution The 4 th platform is the answer to the challenge of having data and not taking full advantage Telco Operators manages different data than OTTs 21

22 Which could be the Telco proposal? Our own data space Managing our own data Different business, different approach than OTTs Different position on consumers data: we do not need to sell customers data Respect & Trust on customers data Based on Telco Strengths Value and Trust Our customers want value for their personal data. They want confidence We believe we are in the best position to provide digital confidence We can provide value to our customers for all the data that we hold Trusted 3 rd Party 22

23 What does Telefonica want to do? Data for customer benefit Give the Data Back to customers To ensure that customers have To guarantee that customers To ensure that data is used to To help business to To deliver Control of their personal data Have a choice Enrich lives Make better decisions Society benefits We have identified hundreds ways to help customers through the information we hold on them 23

24 Some examples where Telefónica is working on show, not just big-data, but also tiny data, can enrich experiences with third parties Credit cards blocked when travelling Customer can opt-in when roam abroad to let know the Bank the customer is outside Credits for un-banked The un-banked credit score for unexpected medical care, start a business can be got from customers mobile data. (60%-70% population not banked in HispAm) Protect savings accounts Hackers use social engineering to move mobile numbers to their phone to intercept the security SMS. For Opted-in customers, Telefónica can tell the Bank when the most recent SIM swap occurred: if it was a few minutes ago they block the transaction and money is preserved. 24

25 We want our customers to have a choice: we want to give back the control to the customer Digital Introvert Digital Extrovert Protect their privacy Engage with brands they are in love with Stop being tracked Receive rewards and incentives on return 25

26 Also working on Digital Confidence: providing the basic tools Security 26

27 Internal data But then, where does the money come from? We don t expect to get direct money from it, since customers already pay us External data Customer and context Differential knowledge Churn Products & Services Video, cloud, security, IoT OSS/BSS/IT Full stack, computation Physical assets Networks, data centres, distribution Engagement Perception A new approach to solve the traditional challenge of Telco operators: The relationships with their customers 27

28 Not all customers have the same needs: helping business customers LUCA, the Big Data Unit Helping business customers to take advantage of their data Anonymized, aggregated & extrapolated data, can provide insights for businesses Great value for: Efficient planning Financial Services, Retail, Insurance Consumer Goods, Outdoor Media 28

29 And data can help us to make decisions Real time contextual campaigns Churn reduction Video content recommendation Fibre / LTE deployment Financial risk control and finance policies Talent engagement Fraud & failure prevention Preserving Data privacy and Data sovereignty 29

30 At Telefónica, we put the customer at the center OTHERS The customer is the product The customer has control over his digital life Advertising Trust Lack of security Privacy and Security 30

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